NEW YORK (AP), Aug 01 _ U.S. manufacturers' business was flat in July, as higher prices and tight credit kept them from expanding, but exports propped them up.

The Institute for Supply Management said its reading of activity from the country's producers of cars, airplanes, appliances and other manufactured goods hit 50, down from 50.2 in June.

Still, it beat economists' prediction of a reading of 49.2, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.

The report has been hovering near 50, which economists call ``the boom-bust line,'' for the last 12 months.

The index of prices manufacturers pay for raw materials grew, but at a slower rate than June, when it hit its highest level since 1979. About 88.5 percent of manufacturers said prices in July were higher than June. No commodities prices fell, according to the report.

At Columbia Gear Corp., a 385-person gear maker based in Avon, Minnesota, steel suppliers that used to change their fuel surcharges every quarter are now changing them every month, said Lyle Nuhring, vice president of sales and marketing.

The company's customers are growing increasingly resistant to Columbia's resulting price increases, asking to see invoices Columbia gets from its suppliers as proof of price increases the company is paying, Nuhring said.

``It's increasing every month and you can't keep going back to them every month,'' he said.

Exports continue to fuel the index, however. The rate of growth for exports slowed, but it was the 68th straight month that exports grew, thanks to the weak dollar.